KBC Flash

What Will the Czech Central Bank Do About 7% Inflation?

Wed, Jan 30 2008, 14:17 GMT
by KBC Market Research Desk

KBC Bank


  • • Czech January inflation will approach 7%, hitting a 9-year high.
  • • The National Bank’s new inflation forecast is likely to be more pessimistic in the short term, while more positive for the next 12-18 months.
  • • The inflation shock should temporarily increase expectations for more aggressive hikes in rates, pushing the koruna to new all-time highs.

In the last quarter of 2007, we were confronted with numerous unpleasant inflation surprises, but this is not the end of the influx of unfavourable figures. The greatest inflation shock may still occur as early as February 8, when January’s inflation, which we put at nearly 7%, will be released. Paradoxically, the CNB Bank Board will discuss interest rate settings the day before.

Published on  Wed, Jan 30 2008, 14:22 GMT

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This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.

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